Norman Alley's complete Universal newsreel available on DVD51
"War in China July 7, 1937, to July 7, 1938" map of "Last Weeks Fighting" with Panay location Dec. 12, 1937, from Time July 1938 - bg
During the "China Incident" airplanes from the Japanese Navy attacked and sank an American gunboat, the USS Panay. Captain James Hughes was following orders to assist the evacuation of American citizens and Standard Oil tankers up the Yangtze river from Nanking. The Japanese planes attacked at 1:27 pm Dec. 12, strafing and dropping bombs. Hughes ordered everyone to abandon ship. On shore, Hughes sent a radio message to the U.S. ambassador in Hankow 200 miles upriver. The survivors travelled Hohsien where they were picked up by the British gunboat HMS Bee and the Panay's sister ship USS Oahu, and taken to Shanghai where they boarded the USS Augusta Dec. 17 for the trip to the United States. The attack had been filmed by Norman Alley of Universal Newsreel and Eric Mayell of Fox Movietone News, and their film was widely seen in American theaters in January 1938.

USS Panay (PR-5) "was built by Kiangoan Dockyard and Engineering Works, Shanghai, China; launched 10 November 1927; sponsored by Mrs. Ellis S. Stone; and commissioned 10 September 1928, Lt. Comdr. James Mackey Lewis in command. Built for duty in the Asiatic Fleet on the Yangtze Patrol, Panay had as her primary mission the protection of American lives and property frequently threatened in the disturbances the 1920s and 30s brought to China struggling to modernize, to create a strong central government, and, later, to meet Japanese aggression. Throughout Panay's service, navigation on the Yangtze was constantly menaced by bandits and soldier outlaws of various stripes, and Panay and her sisters provided the protection necessary for American shipping and nationals, as other foreign forces did for their citizens. Often parties from Panay served as armed guards on American steamers plying the river. In 1931 her commanding officer, Lt. Comdr. R. A. Dyer, reported: "Firing on gunboats and merchant ships have (sic.) become so routine that any vessel traversing the Yangtze River, sails with the expectation of being fired upon." and "Fortunately, the Chinese appear to be rather poor marksmen and the ship has, so far, not sustained any casualties in these engagements."

As the Japanese moved through South China, American gunboats evacuated most of the Embassy staff from Nanking during November 1937. Panay was assigned as station ship to guard the remaining Americans and take them off at the last possible moment. They came on board 11 December and Panay moved upriver to avoid becoming involved in the fighting around the doomed capital. Three American merchant tankers sailed with her. The Japanese senior naval commander in Shanghai was informed both before and after the fact of this movement. On 12 December, Japanese naval aircraft were ordered by their Army to attack "any and all ships" in the Yangtze above Nanking. Knowing of the presence of Panay and the merchantmen, the Navy requested verification of the order, which was received before the attack began about 1327 that day and continued until Panay sank at 1554. Three men were killed, 43 sailors and 5 civilian passengers wounded. A formal protest was immediately lodged by the American ambassador. The Japanese government accepted responsibility, but claimed the attack unintentional. A large indemnity was paid 22 April 1938 and the incident officially settled. However, further deterioration of relations between Japan and the United States continued, as did provocations, many of them stemming from the Japanese Army whose extremists wished war with the United States." (text from Dictionary of American Naval Fighting Ships)

According to Charles Jellison, the reaction to the sinking of the Panay was mixed: "When news of the attack reached the U.S. capital, a furious President Franklin D. Roosevelt called for a strong response, 'a forceful gesture,' to put the Japanese on notice that the United States did not take such matters lightly Roosevelt and his cabinet discussed possible reprisals, including holding naval maneuvers in the China Sea or cutting off certain exports critical to Japan. It soon became apparent, though, that not many of the president's countrymen shared his outrage - or, if they did, they preferred not to make a big issue of it. Political leaders of both parties, including most of Roosevelt's cabinet, downplayed the incident and urged restraint, as did most of the press and the people at large. Nevertheless, President Roosevelt instructed Secretary of State Cordell Hull to deliver a letter of protest to the Japanese ambassador in Washington, advising the Japanese government that he was "deeply shocked and concerned." The president demanded an apology, full compensation for the attack, and assurances guaranteeing against a similar episode in the future. On December 24, the U.S. government received a formal apology from Tokyo. The Japanese government would, of course, punish those responsible for the 'grave blunder' caused by 'poor visibility' and pay full reparations. Washington officials prepared a bill of indemnification and sent it to Tokyo. Within four months the U.S. government received a check for $2,214,007.36. Meanwhile the Japanese press and public outdid themselves in expressions of friendship and 3 sympathy toward the American people. Tokyo schoolchildren contributed $10,000 worth of pennies to a fund for the victims of the Panay, and Americans in Japan were stopped on the streets and offered apologies. In what one Tokyo newspaper called 'an uttermost gesture,' a young Japanese woman appeared at the U.S. Embassy, cut off her hair, and presented it to the American ambassador.

"The newsreels reached American movie houses in mid-January Norman Alley was correct - between the two of them, he and Eric Mayell had missed very little. Viewers could see the Panay bobbing about at anchor in the middle of the river, minding its own business with its colors in full view, while from almost directly overhead the sun shone down through a cloudless sky. Suddenly Japanese planes swooped down on the ship. Time and again they came, savaging the Panay with bombs and machine-gun fire, while the movie cameras jumped about wildly with each explosion. The cameras had recorded scenes of the ship's devastation, the strafing of the lifeboats, the suffering of the wounded among the reeds, and the search planes circling overhead. There was no mistaking the meaning of it all - the Japanese had lied. There had been no visibility problem, no mistaken identity, and no 'grave blunder.' The Japanese had known what they were doing, all right, and they had done it with a vengeance. Even so, the American people were not exactly stirred to great wrath. They were clearly in no mood for the effects of another Maine or Lusitania. With the results of the Depression still being felt, people had enough to worry about at home without risking war with Japan over something that had happened half a world away. Instead the people chose to vent their anger, such as it was, against their own government. What was an American gunboat doing in China in the first place? Didn't the president and Congress know there was a war going on over there? What were they trying to do, make the Orient safe for democracy? All good questions, but they missed the point--a United States naval vessel had been deliberately and wantonly sunk by a foreign nation in time of peace. Shouldn't something be done about it? The answer was obviously "No." And anxious to avoid war, the United States government accepted the Japanese explanation and, in effect, let the matter drop. Yet it was a bitter pill for President Roosevelt to swallow. "I suppose it could be argued," he said to a friend, "that doing nothing is the next best thing to doing something." "Now," commented a small-town Idaho newspaper, "we can all sit back sans excitement--until Japan decides to sink another of our warships." (text from Jellison)



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